‘If program implementation remains strong, I am confident that the Greek people will make visible strides toward a sound recovery,’ said the European Stability Mechanism managing director.
Photograph: Yannis Behrakis/Reuters

Greece has been formally cleared to receive its next bailout loan, worth €2bn (£1.4bn), after it agreed to implement new austerity measures.

The eurozone bailout fund, the European Stability Mechanism (ESM), said on Monday it had agreed to release the next instalment of the country’s bailout programme, following a €13bn payout in late August.

The approval was expected after Greece’s parliament last week approved new austerity measures, which include higher taxes on wine and road use as well as increased limits on protections for distressed mortgage holders.

“If program implementation remains strong, I am confident that the Greek people’s reform efforts will allow them to make visible strides toward a sound recovery,” said the ESM managing director, Klaus Regling.

Opposition to the latest measures, however, cut the leftwing government’s majority in parliament from five seats to three.

The government is racing to complete a bailout-supported recapitalisation of its troubled banks before the end of the year and still faces a long list of more painful measures that include an overhaul of the national pension system.

The Greek economy is expected to slip back into a recession next year, according to the 2016 budget submitted to parliament last week, while the national debt is set to climb higher, reaching 188% of annual economic output, or €327.6bn.